> ## Documentation Index
> Fetch the complete documentation index at: https://docs.upstackdata.com/llms.txt
> Use this file to discover all available pages before exploring further.

# New Customer CM2 MER: First-Order Variable Margin Efficiency

> Track new customer CM2 MER for your Shopify store. Measure variable margin generated per dollar of ad spend on first orders.

<Tip>
  New Customer CM2 MER measures how much variable margin (after COGS and fulfillment) you generate from first orders per dollar of ad spend.
</Tip>

## Formula

<Info>
  **New Customer CM2 MER** = **New Customer CM2** ÷ **Ad Spend**
</Info>

### Formula Components

| Metric                                                                                 | Definition                                   |
| -------------------------------------------------------------------------------------- | -------------------------------------------- |
| [**New Customer CM2**](/reference/metrics/orders/contribution-margin/new-customer-cm2) | Variable margin from first-time buyer orders |
| [**Ad Spend**](/reference/metrics/advertising/blended/blended-spend)                   | Total advertising spend                      |

| Metadata        |                                                                                             |
| --------------- | ------------------------------------------------------------------------------------------- |
| **Type**        | Ratio                                                                                       |
| **Data Source** | [Shopify](/sources/catalog/shopify), [Advertising Platforms](/sources/catalog/facebook-ads) |
| **Aggregation** | Ratio                                                                                       |

***

## Example

Your Shopify store generates **\$22,000** CM2 from new customers and spends **\$15,000** on ads.

| Component                | Value    | Calculation                 |
| ------------------------ | -------- | --------------------------- |
| New Customer CM2         | \$22,000 | First-order variable margin |
| Ad Spend                 | \$15,000 | Marketing cost              |
| **New Customer CM2 MER** | **1.47** | \$22,000 ÷ \$15,000         |

***

## How It Works

New Customer CM2 MER shows variable margin efficiency after accounting for both COGS and fulfillment costs. This is more realistic than CM1 MER for evaluating acquisition economics because it includes shipping and handling.

***

## Benchmarks

| Rating       | Range     |
| ------------ | --------- |
| Excellent    | > 2.0     |
| Good         | 1.2 – 2.0 |
| Moderate     | 0.8 – 1.2 |
| Unprofitable | \< 0.8    |

A value below 1.0 means fulfillment-adjusted margin doesn't cover ad spend.

***

## Related Metrics

| Metric                                                                             | Relationship                |
| ---------------------------------------------------------------------------------- | --------------------------- |
| [New Customer CM2](/reference/metrics/orders/contribution-margin/new-customer-cm2) | Numerator (variable margin) |
| [CM2 MER](/reference/metrics/orders/performance/cm2-mer)                           | Overall CM2 efficiency      |
| [New Customer CM3 MER](/reference/metrics/orders/performance/new-customer-cm3-mer) | After transaction costs     |

[See all Performance metrics →](/reference/metrics/orders/performance)